Top 5 Reasons Why Brands Should Maintain MSRP/MAP Control

Soaring inflation, which is expected to reach double digits in many European countries in the coming months, is driving living standards down and making customers more price conscious.

Rising costs will inevitably force brands to raise prices in the short to medium term. At the same time, online retailers can be more flexible in pricing, attracting customers with discounts on one item while earning money on another.

As a result, in highly competitive segments, without monitoring and control, the total number of MSRP deviations will increase.

MSRP and price wars

MSRP and marginality of goods

MSRP and brand reputation

MSRP and omnichannel

MSRP and trust from sellers

MSRP monitoring is simple

Why should manufacturers control the RRP?

MSRP minimizes the risks of price wars

E-commerce is fiercely competitive. Pricing under such conditions is like a chess game, where every action by one seller is inevitably followed by a reaction from another. Thus, when one retailer offers a discount, it is quite possible that its direct competitors will react in the opposite direction. So a price war can turn into a price cascade in which brands are left wondering how, in just a few days, the cost of all their products fell to wholesale or, in some cases, even lower.

In the future, when it becomes unprofitable for retailers to sell products with a minimum profit (or without one at all), sales volume will fall. In the medium term, the price collapse below the MSRP does not benefit the retailer, the distributor, or the manufacturer. MSRP establishes a price floor and helps brands protect product margins for all parties.

If you plan to stay in the market for a long time, don’t let price wars kill your brand’s appeal to retailers — implement MSRP monitoring.

MSRP control is the best way to protect product margins

If you don’t maintain MSRP control, partners can sell your products for zero profit or even in the red. They attract customers with “best deals” and receive a margin from cross-selling accessories with a higher rate of profit.

If you want to maintain the product margin, make sure that partners comply with the MSRP.

MSRP helps uphold the brand’s reputation

If you don’t control the MSRP, sellers have more room to compete on price than on service. Why improve the customer experience when you can simply price below the competition?

Buying your product from a “lazy” seller who does not invest in the service quality can lead to a negative experience that will somehow be associated with your brand. This inevitably affects the product’s perception and not just the online store where it was purchased.

When a customer is looking for the best deals and sees that all websites have the same price, he will go to the seller he knows and trusts. This means that your customers will be less likely to get “unforgettable” experiences from poor service.

If you want to provide the best shopping experience, you need to help raise the service level and control the MSRP.

MSRP helps develop omnichannel retailing

The recommended retail price benefits not only the manufacturer but also the sellers because it promotes competition with service, not price. All market players win if they do not lose profits due to dumping. This is especially true for offline sellers and those online stores that find it difficult to compete on price with e-commerce market leaders and marketplaces.

Assume a marketer in an offline store notices that online stores regularly sell your product at a lower-than-recommended price, i.e., at a price that they absolutely cannot afford due to high overhead costs. In this case, he is likely to be less enthusiastic about using precious shelf space for your products. As we know, consumers compare prices offline and online.

MSRP control equals a level playing field for all partners, big and small, online and offline. If your product is available in many sales channels, it will likely generate more sales. Therefore, it may be part of your omnichannel strategy.

The MSRP control increases your brand credibility

Retail partners who want to play the long game really want to work with the brands that control MSRPs. They know that if any of their competitors dump and start price wars, you will take care of it. They can alert you to dishonest competitors’ actions. With the help of an effective monitoring tool, you can track who:

• was the first to depart from the suggested retail price;
• systematically pursues a policy of dumping;
• bypasses the MSRP, changing prices at night or on weekends.

If you are building a responsible partnership, you should not only introduce the MSRP, but also effectively control it to provide fair conditions for all partners.

MSRP monitoring may be easy

MSRP control is one of the key tasks for building a strong brand and protecting its competitiveness and marginality. However, this process must be regular and, frankly, can take a long time for marketers if carried out manually.

We offer an alternative. This is a useful tool that handles all routine data collection tasks for you. Using the Pricer24 service, you can:

• conduct a market analysis for a specified time period to determine which retailers have the most deviations, as well as how frequently and to what extent they occur;
• quickly identify which partners deviated from the MSRP first;
• find out at what prices your products are sold at night and on weekends;
• see not just the facts of deviations, but also their size, finding problem areas that should be dealt with in the first place;
• export product lists with MSRP deviations to Excel;
• set up automatic sending of letters to your email or retailer when deviations are detected.

Are you looking for a functional, easy-to-use solution? Just contact us! We will provide you with a demo to show all the advantages of MSRP monitoring in Pricer24.